What moves the markets today

U.S. stock futures rise amid optimism over the impact of a new trade agreement between the U.S. and Japan.
The White House calls the deal, which will lead to lower U.S. tariffs on Japan than initially announced by President Donald Trump, “massive.”
A parade of corporate earnings is ahead, highlighted by tech giants Alphabet (NASDAQ:GOOGL) and Tesla (NASDAQ:TSLA) after the market close.
Shares of Texas Instruments (NASDAQ:TXN) are falling as its quarterly earnings outlook fails to impress investors.

1. Futures are rising
U.S. stock futures are rising on Wednesday after a new trade agreement between the U.S. and Japan introduced lower tariffs for the Asian nation than those initially announced by the White House.

As of 03:38 a.m. ET (07:38 a.m. GMT), Dow futures were up 137 points or 0.3%, S&P 500 futures gained 17 points or 0.3%, and Nasdaq 100 futures rose 26 points or 0.1%.
The major Wall Street averages shifted at the close of trading on Tuesday, as investors assessed a series of fresh corporate earnings.

Shares of General Motors (NYSE:GM) are plunging after the automaker said its second-quarter revenue fell by more than a third, mainly due to $1 billion in costs related to Trump’s tariffs.
Still, optimism around heavy artificial intelligence spending helped support some mega-cap tech stocks.
A test of this enthusiasm is expected later today, when Google parent Alphabet and electric vehicle maker Tesla report their latest results.

2. U.S.–Japan trade agreement
Trump announced that his administration has struck a “massive deal” with Japan under which the Asian country will face 15% tariffs.

The president added that Japan will invest $550 billion in the U.S., from which the U.S. will “get 90% of the profit.”

“Japan will open its country to trade, including cars and trucks, rice and some other agricultural products, as well as other things. Japan will pay reciprocal tariffs to the United States at a rate of 15%,” Trump wrote in a social media post.

“The trade deal with the U.S. announced today removes a key downside risk to the Japanese economy,” analysts at Capital Economics said in a note to clients.
“We believe the net effect of today’s announcement will be a reduction in the average tariff rate faced by Japanese exporters in the U.S. by about one percentage point.”

3. Alphabet and Tesla to report
Amid the backdrop of Trump’s trade agenda trajectory, markets are also gearing up for key earnings releases from Alphabet and Tesla.

The two companies will be the first of the so-called ‘Magnificent Seven’ tech giants to open their books for the second-quarter reporting period.

Analysts will be watching for any updates from Alphabet on its artificial intelligence ambitions, especially as the search giant recently reiterated its plans for significant investments in the emerging technology.
Investors are likely to want to see the company use spending to defend its search and advertising business from emerging AI rivals.

“For Google, sentiment is very mixed, with bears concerned about long-term search prospects as AI chatbots gain share and regulatory legal pressures mount, while bulls highlight compelling long-term tailwinds in many key markets and a relatively low valuation,” analysts at Vital Knowledge said in a note.

Meanwhile, Tesla will be under scrutiny as the carmaker struggles with intensifying competition that has eroded sales in its core auto business.
Deliveries have declined year-on-year, and analysts are signaling further issues following Trump’s fiscal bill signed on July 4, which eliminated tax credits for solar and electric vehicles.

Still, hopes remain that Tesla may eventually develop a new revenue stream from its robotics and self-driving plans.
Vital Knowledge analysts noted that expectations around these initiatives have kept Tesla shares high “above where they should be trading based solely on the fundamentals of the auto industry.”
Tesla’s stock price is down more than 12% so far this year.

4. Texas Instruments shares fall
Texas Instruments reports stronger-than-expected second-quarter results, aided by improved demand in its industrial business, though shares tumbled in after-hours trading as investors worried about the outlook for its analog chip unit.

Revenue rose 16% from the previous year to $4.45 billion, matching the upper end of guidance and beating analysts’ estimate of $4.35 billion.

Earnings per share came in at $1.41, including a 2-cent gain not previously forecasted by the company.

The company said revenue increased 9% sequentially, driven by a “continued broad recovery” in its industrial segment.
Net income for the quarter was $1.30 billion.

For the third quarter, Texas Instruments expects revenue between $4.45 billion and $4.80 billion and earnings per share of $1.36 to $1.60.
That compares with analysts’ forecasts of $4.59 billion in revenue and $1.49 earnings per share, according to LSEG data cited by Reuters.

Although the group has not yet been directly affected by Trump’s tariffs, costs related to chipmaking tools have increased and prompted some end clients to curb spending.
In a call following the results, CEO Haviv Ilan warned that the recovery in the automotive business is “shallow,” as tariffs and geopolitics “disrupt and reshape” global supply chains.

5. Gold declines
Gold prices fell, pulling back slightly from strong gains this week after the U.S.–Japan trade deal boosted risk appetite and took some shine off the metal’s safe-haven appeal.

But the yellow metal was still less than $100 away from its record high in April, as markets remained uncertain over Trump’s trade tariffs.

Caution ahead of the closely watched Federal Reserve meeting also supported gold, while the dollar retreated from its recent gains.